Stocks on the Road to Greatness

For every stock out there screaming "Buy me!" others simply give us a nudge and a wink. While all the attention might be focused on their five-star peers, we can sift through Motley Fool CAPS to find four-star stocks giving us the "high sign" they're approaching greatness.

These opportunities -- including familiar names and beaten-down old friends -- rank higher than most of the other 5,400 starred companies, and it pays to investigate their potential. For consideration today, I've got a pair of stocks on their way to fame and glory.

In the sight of greatnessThere was a time when the clock ticking down on Elan's viability sounded almost as loud as a clanging fire bell. Its once-blockbuster drug Tysabri was tagged as potentially lethal because two patients had developed a rare brain infection, progressive multifocal leukoencephalopathy, or PML. Elan's partner Biogen Idec (Nasdaq: BIIB) pulled the multiple sclerosis drug from the market and the vultures began circling overhead.

Yet Elan and Biogen stalwarts suggested the fears were overblown: That, while the development posed a significant hurdle, they would still be able to bring Tysabri back to market, albeit to a smaller subset of patients. The bulls proved right and not only did the MS drug return, it turned into the blockbuster it was always thought to be. Tysabri generated $1.2 billion in sales in 2010 and Elan saw nearly three quarters of its annual revenues derived from its sales. It's since generated nearly $1 billion in additional sales in the first nine months of 2011, a 13% increase over the year-ago period, with global sales up 28% in the third quarter alone.

Now Elan and Biogen report Tysabri received approval for a label change that ought to give it even wider distribution to patients with multiple sclerosis by testing whether they have a lower susceptibility to developing PML. Developed by Quest Diagnostics (NYSE: DGX) the test should lower the risks of using the drug.

I'm late to the game, for sure, but better late than never. These new developments should open up even more sales opportunities for this wonder drug, so I've marked on CAPS for Elan to outperform the broad indexes. Now, with its fortunes so closely aligned to Tysabri, an investment here does carry risk. It needs to start diversifying itself more to lessen the chance that another upset like the PML development might wreck the stock.

Put Elan on your Watchlist, and let us know in the comments section below how far you think the new labeling and testing will carry the drugmaker.

Revving its enginesChristmas buying might have been a boon for Amazon.com, which saw sales rise a scorching 40% this past quarter, but it also meant a lot more business for package delivery services United Parcel Service and FedEx (NYSE: FDX) . It also means it will generate record return shipments. Earlier this month, UPS said it expected to handle a record number of returns on one day as consumers bounced 550,000 items back to retailers. That's 8% more than it handled last year. Package delivery is so busy that FedEx is raising rates this year. UPS instituted rate hikes last year.

UPS is a little more richly valued than its counterpart across a number of metrics, but with burgeoning demand and a pricing environment that allows for indiscriminate increases without fear of losing business, the two services have a unique opportunity to offer investors higher profits.

CAPS member CStoneNo37 adds the U.S. postal service is also raising rates, but cutting back on services, so UPS should gain even more business while maintaining a competitive edge over FedEx.

As the U.S. Postal Service raises prices and pulls back on service, UPS is perfectly positioned to benefit. It's cheaper than FedEx and more reliable than USPS, plus it's Amazon's carrier of choice.

Tell us in the comments section below or on the UPS CAPS page whether it will continue to deliver the goods for investors, and then add it to My Watchlist to see if the loftier valuation turns out to be worth it.

A great opportunity for youInvestor sentiment suggests these four-star investments still seem to be on their way to five-star greatness, but if you're looking for just one energy stock to play in 2012, click here to read The Motley Fool's free report, "The Only Energy Stock You'll Ever Need." But do it today, because, like low energy prices, it won't be around for long.

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